And so we thought that might be a good idea for us.ĮGON DURBIN: And this control aspect together is incredibly important, because everyone focuses on how much money we invest in and how much money we take out. And Skype was for sale due to reasons that Egon pointed out, which it was just a very unusual circumstance. And things like Skype just don’t come for sale very often. But, for us, the whole theory of the firm is, we wanted to invest in the most important technology companies that were going to be the biggest franchises. There was nothing venture capital about it. In a lot of respects, there were elements of a turn around inside of a super high growth opportunity, and marrying that with Ben and Marc and their firm, which is their first investment of all things.ĪDAM LASHINSKY: Your very first investment.ĪDAM LASHINSKY: And not only was it your first investment, but it’s not the kind of ‑‑ it was not the dollar size that most people would call venture capital, correct? It was $50 million.īEN HOROWITZ: Well, value wasn’t the size, but it wasn’t a venture capital deal. Complicated carve out, significant management restructuring, cultural invigoration, and some of the things that our firm focuses on, and has a tremendous amount of experience. It was the first LBO that was done post-Lehman at the biggest debt issuance that had been done post-Lehman. We went through the exercise, hand-holding, and it’s such a unique situation where we thought, you’re doing a carve out. Is that accurate or was it more simultaneous?īEN HOROWITZ: Completely simultaneous. First Silver Lake was invested, and you went to Andreessen Horowitz and said, we have some good reasons why we should be together. You were obviously only going to be interested in buying Skype if you could have Skype, right?ĮGON DURBAN: If you could ultimately figure out a path through the morass where you ended up owning ‑‑ the analogy we always used was, if we could buy the engine to go with the car.ĪDAM LASHINSKY: Now, in our article, we suggested that the involvement with Andreessen Horowitz was a one-two punch. You’d gone through multiple management changes at the company.ĪDAM LASHINSKY: And you had to figure out a way. The founders leaving, the founders going through a litigation process with the company around an intellectual property dispute. Subsequently writing down the value of their acquisition. The history around Skype, though, it is sort of a coin of two sides, where you’ve got this phenomenal brand assets, tremendous engineering talent in Estonia, but on the other hand this kind of deeply troubled history starting with eBay being widely criticized by their shareholders and analysts for paying way too much for the asset. And through that several folks had made approaches. So, you kind of get a sense there that they were working on kind of a standalone path to spin out the company. And when Donahoe took over the CEO reins.ĪDAM LASHINSKY: And Donahoe took over from Meg Whitman.ĮGON DURBAN: –took over from Meg, one of the first things he did was decide what was core and non-core, and publicly disclosed that they were going to think about alternatives for Skype. I think all of us, and Ben can speak for himself, sort of watched Skype with great fascination, truly one of the great consumer Internet brands and success stories, particularly in Europe. So, it’s 2008, correct? I want to understand what first gave you the notion that this interesting company owned by eBay (EBAY) would make for a good acquisition? Kevin Maney in a story in Fortune magazine compared Skype to Kurt Cobain, wildly popular and deeply troubled.ĮGON DURBAN: Yes. So, I want to attempt to take us through this chronologically, Egon. And that’s the way all the way through to closing.ĪDAM LASHINSKY: Great. But, we run the company completely independently, the way we run the strategy, the way we run the business, the way we operate the management team, and so on. We do have part of the agreement, as with anything, when you’re in this stage, for those of who hope to get to go through this, between signing and closing, if there are material issues within there, we do run those by Microsoft. We work with the investors two of the primary investors are here on the stage with me. The way the governance rule is set up is absolutely we’re an independent company. And what levels of engagement can Microsoft, does Microsoft have during that period? But we have to work through the normally processes and procedures.ĪDAM LASHINSKY: So, in that timeframe, you run the company with your investors continuing to own the company. Maybe sort of October timeframe would be my guess. So, it’s anyone’s guess, but I would say we’ve got a couple of months more here. I think many of you know, we already got through the U.S. We hope, again, subject to regulatory approval. Tony, just quick facts, remind us, would you, when the Microsoft (MSFT) acquisition is expected to close.